A new report from the Centre for Future Work has found that Australia’s private for-profit dominated childcare market is undermining the quality, safety and accessibility of early childhood education and care (ECEC) – and that switching public funding to not-for-profit and government providers would deliver a $1.2 billion economic boost.

The report, The Real Cost of Profit: Markets and profit in early childhood education and care, authored by Fiona Macdonald with economic modelling by Matt Saunders, examines the performance of Australia’s ECEC system, over half of which is run by private for-profit businesses.

• Over half (54%) of ECEC services are run by private for-profit businesses, and for-profits operated 10 of every 11 services rated ‘significant improvement required’ in early 2025.

• Not-for-profit services generally outperform for-profits: higher quality care at lower prices, higher wages, more experienced staff, longer staff retention, and greater reach into under-served and disadvantaged areas.

• Directing public ECEC funding only to not-for-profit and government providers would generate at least $1.2 billion more in economic activity in 2026 than the current provider mix.

• The shift would support an estimated 18,000 additional jobs and lift government revenue by more than $360 million in 2026.

The report argues that achieving a genuinely universal, high-quality ECEC system will require reshaping the sector as a public good, rather than relying on tighter regulation of a market still dominated by for-profit providers.

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Research page: The real cost of profit: markets and profit in early childhood education and care

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